Mired in unyielding haze-tinged sunlight and seventy-five-degree weather, the Los Angeles winter closely resembles the incandescent lateral market it circumscribes. Like my colleagues’ prognostication last week, the outlook for the Los Angeles market is positive; nonetheless, there are some caveats to this overall trend of growth.
January opened slower than last year with 42 total lateral moves, the third highest since the recession behind 2014 (43) and 2012 (57). However, so far through February, the market is on track to beat both those years and make up ground on claiming the best post-recession first quarter—which our model predicts.
The L.A. partner and associate market operate on nonsynchronous tracks. The partner market has little seasonality, with about an equal number of moves taking place each quarter. The standard deviation for the partner market since 2010 is 9.7, which is low compared to the associate market’s 23.2.
Navigating the partner market in Los Angeles can be difficult. Needs are hardly ever posted publicly and often require an inside connection or inquiry which can be dangerous and jeopardize your current partnership. Only six partners needs have been posted since January, despite over twenty partners moving already.
Although Los Angeles is the third largest legal market outside of New York and D.C., measured by the number of attorneys in the market, the L.A.-legal services market is mostly a middle-market practice with a small percentage of partners that posses significant portables practices who can write their own ticket from where they would like to service it. In the L.A. lateral partner market, it is especially important to have a representative or recruiter to help you broker a lateral move. Information is key to leveraging the right deal.
Associates can breath easy; their task is simpler—yet still onerous. Openings in the L.A. market are comparable to its big city brethren. New York and D.C. easily outpace the other markets, but this is expected given their relative sizes.
The most popular associate need by far is litigation, which accounts for 30% of the current lateral demand. Los Angeles features more practice parity than all of the other ‘big five’ markets aside from Chicago, and the standard deviation between practice shares is twenty percent lower than New York’s.
The L.A. market is still dominated by the elite west-coast schools including UCLA, USC, Berkeley and Stanford. However, Am Law 200 firms in Los Angeles are increasingly recruiting out of East Coast schools and firms to fill partner and associate needs. In particular, Harvard alumni are doing well in the Los Angeles market. There are about an equal number of Harvard and Berkeley alumni in Los Angeles, and twice as many Harvard than Stanford alumni—though the size disparity accounts for the latter. As a fellow alumnus of Harvard, I have recently endowed the school with a scholarship fund, which will give back to the school 10% of the gross fees Lateral Link accrues on the placement of Harvard attorneys, which you can read more about here.
The associate market should have its best first quarter since the recession with one more lateral move than 2012. Overall, 2015 should be a banner year for the L.A. associate market. We project that the third quarter will be incredibly strong for the market before settling in the fourth. Overall, our ARIMA (autoregressive integrated moving average) model predicts that there will be 416 associate moves in 2015, easily eclipsing the last few years.
The partner market on the other hand is not quite so robust. The ARIMA forecast still predicts that 2015 will be the best post-recession year, but only by a slim margin.
Lateral Link is working with a large pipeline of partners who are planning lateral moves in the next year or two, so this model could become antiquated should their timeline move up. Overall, though the prognosis is not as favorable as the associate market, the lateral partner market is still making positive and stable strives that should engender steady long-term growth.
The overal market in Los Angeles is expected to continue its strong rebound. 2015 is projected to have an unprescedented number of lateral moves.
A Los Angeles office is no longer a luxury for many East Coast based Amlaw 100 firms, but a real profit center. With the injection of start-ups in the appropriately dubbed ‘Silicon Beach,’ region of Venice, lawyers should trickle down from its northern namesake as these SaaS, e-commerce and entertainment companies grow. Between the weather and market, it is hard to find a reason not to practice law in Los Angeles.